Harvard

“The share of total income going to the top 1 per cent of income earners has increased dramatically, from 9 per cent in 1970 to 23.5 per cent in 2007, the highest level on record since 1928 and much higher than in European countries or Japan today. Meanwhile, the top tax rate has fallen by half, from 70 per cent to 35 per cent.”

In fact,

“because the top 1 per cent has captured about half of income growth since the 1970s, income growth for the bottom 99 per cent has been only about half of the macroeconomic growth we always hear about in the press.”

The second of the quotations is from an interview with Emmanuel Saez of Berkeley, winner of the John Bates Clark Medal, which goes to an outstanding economist under the age of 40. The first is from an article entitled “Taxing High Earnings” that prof Saez wrote jointly with Peter Diamond of MIT, a winner of the Nobel memorial prize in economics.

Both come from a collection of essays by well-known commentators and analysts, in response to the Occupy Wall Street movement.* The authors include, among many others, Raghuram Rajan of the University of Chicago’s Booth School of Business, Daron Acemoglu and James Robinson, of MIT and Harvard, respectively and Michael Lewis, the well-known author. Even Gillian Tett and Martin Wolf of the Financial Times are to be found in this list. Read more

Martin Wolf Exchange

Economic issues

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About Martin

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On this blog, I will open the discussion of a topic that I am thinking about. My aim will be to elicit views of readers. I will give my own response to the question I have raised, before posting the next issue for discussion.

Martin Wolf is chief economics commentator at the Financial Times, London. He was awarded the CBE (Commander of the British Empire) in 2000 “for services to financial journalism”. Mr Wolf is an honorary fellow of Nuffield College and of Corpus Christi College, Oxford. He is also an honorary professor at the University of Nottingham. He has been a forum fellow at the annual meeting of the World Economic Forum in Davos since 1999 and a member of its International Media Council since 2006.

Martin was made a Doctor of Letters, honoris causa, by Nottingham University in July 2006 and a Doctor of Science (Economics) of London University, honoris causa, by the London School of Economics in December 2006. He was joint winner of the 2009 award for columns in “giant newspapers” at the 15th annual Best in Business Journalism competition of The Society of American Business Editors and Writers and won the 32nd Ischia International Journalism Prize in 2012. Martin's most recent publications are Why Globalization Works and Fixing Global Finance.